This spreadsheet project is a continuation of the spreadsheet projects in earlier chapters. If you completed those spreadsheets, you have a head start on this one.

1. Handyman wishes to prepare a forecasted balance sheet and income statement for 2013.

Use the original financial statement numbers for 2012 [given in part (1) of the Cumulative Spreadsheet Project assignment in Chapter 2] as the basis for the forecast, along with the following additional information:

a. Sales in 2013 are expected to increase by 40% over 2012 sales of $700.

b. Cash will increase at the same rate as sales.

c. The forecasted amount of accounts receivable in 2013 is determined using the forecasted value for the average collection period. For simplicity, do the computations using the end-of-period accounts receivable balance instead of the average balance.

The average collection period for 2013 is expected to be 14.08 days.

d. The forecasted amount of inventory in 2013 is determined using the forecasted value for the number of days’ sales in inventory (computed using the end-of-period inventory balance). The number of days’ sales in inventory for 2013 is expected to be 107.6 days.

e. The forecasted amount of accounts payable in 2013 is determined using the forecasted value for the number of days’ purchases in accounts payable (computed using the end-of-period accounts payable balance). Th e number of days’ purchases in accounts payable for 2013 is expected to be 48.34 days.

f. The $160 in operating expenses reported in 2012 breaks down as follows: $5 depreciation expense, $155 other operating expenses.

g. No new long-term debt will be acquired in 2013.

h. No cash dividends will be paid in 2013.

i. New short-term loans payable will be acquired in an amount sufficient to make Handyman’s current ratio in 2013 exactly equal to 2.0.